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In: Accounting

For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $1,920,000...

For its three investment centers, Gerrard Company accumulates the following data:

I II III

Sales $1,920,000 $4,013,000 $4,033,000

Controllable margin 833,510 2,486,510 4,083,400

Average operating assets 4,903,000 8,021,000 12,010,000

The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease controllable fixed costs $404,000; (III) decrease average operating assets $534,000.

Compute the expected return on investment (ROI) for each center. Assume center has a contribution margin percentage of 74%. (Round ROI to 1 decimal place, e.g. 1.5.)

The expected return on investment
I: % II: % III: %

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Expert Solution

for formulas and calculations, refer to the next image -

ekkarill92 answered 2 months ago
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